Indecent Exposure

Revelations that European’s money –
and EU-based investors – play a key role in funding projects linked to human
rights abuses, land grabs and large-scale environmental destruction, are
unfortunately far too common place.

With the political momentum
building to make the financial sector more accountable for today’s vast
sustainability challenges - be it climate change or threats to local
communities - the EU, investors and companies have a historic opportunity to
act to close these loopholes.

Our new briefing paper draws on previous Global Witness exposés to highlight
the devastating impact of harms caused by predatory natural resource projects
on communities around the world and the role that some
EU-based investors have played in supporting them.

This includes case studies
involving European investments in:

Oil
exploration in Africa’s oldest national park

A
mining project in India which sparked violent protests

Deforestation
and land grabbing in Asia and Africa

An historic opportunity for the
European Union

The EU’s landmark Action Plan on
Financing Sustainable Growth claims to ‘reorient private capital to more
sustainable investments’ and mainstream sustainability across investors’ risk
management. This is a major step forward.

But while strong on rhetoric, the Action Plan lacks the substance to truly
tackle the social and environmental harm caused by the financial sector.

The Commission’s legislative
proposals released in May lacked robust measures to stop for example, EU
investors playing a role in bankrolling projects linked to violent attacks on people
peacefully protesting against damaging environmental projects on indigenous
land.

This briefing makes the argument
for the EU’s plan to make the financial sector more sustainable to include
mandatory regulations for EU investors, and their overseas subsidiaries, to
carry out to due diligence in order to identify, mitigate and publicly report
on the environmental, social and governance risks in their investment chains.

EU investors can also play a powerful role in improving the
overseas operations of the companies they invest in by insisting on high ESG
standards, but at present this is at best inconsistently applied.

Read our full recommendations on the
EU’s Action Plan on Financing Sustainable Growth, Due Diligence and DSR
regulation in our briefing here.

An indicative timeline of EU Parliamentary activity on sustainable finance can be seen below